IGCSE/GCSE/O & A Level/IB/University Student Forum
Qualification => Subject Doubts => GCE AS & A2 Level => Commerce => Topic started by: pastyear on June 03, 2010, 02:50:04 am
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How do you write about this essay?
Is the government policy always aim at full employment? Discuss the impacts of the policy and its limitations.
Can someone pls write out what to include with some explanations. Thanks.
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anyone pls help!!!
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First, Consider all the macroeconomics objs.
To answer this question first give all the pros of low unemplymement.
Next consider the tradeoffs:
The Philips curve shows that these two have an inverse relationship. If the government tries to
reduce unemployment by lowering interest rates and increasing public spending then prices will rise.
This is because firms will be providing higher wages in order to attract workers from a diminishing
pool of the unemployed.
On the other hand, when the government tries to control high inflation with higher interest rates
and reduced spending, the resulting reduced consumer spending and lower investment will result in
job losses.
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anythings neede to include as this is 25 marks?
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You may want to consider what policies are used to ensure full employment.
For example, the government may use Supply Side policicies where it sets up training facilities for Unskilled and Semskilled workers.
However, he opportunity cost of this is that the money could have been spent on hospitals.
Then the government may increase public expenditure to boost Aggregate Demand. This will lead to economic growth and increased national output SO more people will be employed reducing unemployment.
BUT this could lead to inflation in the wrong run : DEMAND PULL INFLTION <------develop this.